Microsoft <http://www.microsoft.com/>'s net income fell 11 percent for the
quarter ended December 31, 2008. Because of this, and despite a 2 percent
revenue rise, 5,000 jobs are being cut, Microsoft has announced.

No surprise, the rummor has been around for quite a while.
The real bad news for today is: the house market in the US is keep falling, and no sign of recover.
Funny N.
Au Group Electronics, http://www.AuElectronics.com

Microsoft <http://www.microsoft.com/>'s net income fell 11 percent for the
quarter ended December 31, 2008. Because of this, and despite a 2 percent
revenue rise, 5,000 jobs are being cut, Microsoft has announced.

> The real bad news for today is: the house market in the US is keep
> falling, and no sign of recover.

Why is this bad? It doesn't matter much for all who have a house and no
or only reasonable debt. It is good for all who want to buy a house. It
is bad for those who happen to have a house with more debt than the
house is worth -- which is probably a small minority.

I am not economist but as far as I know when property prices drops it is
considered as 'bad'. It is mostly because most people do not buy the
property but getting a mortgage - so they get the that mortgage when the
property value is higher. Now let's say one bought the house for 300k euros,
and the next year for some reason he/she wants to move to another city but
in the meantime the price dropped to 250k. he/she cannot sell the house for
300k but the bank asks that mortgage back... Also because you pay the
interests of the bank first then the actual mortgage your amount you have to
pay back is still the same for the first 4 or 5 years anyway.

Now, you say you lost your job or got a permanent illness so you cannot pay
your mortgage anymore. The bank takes your property, however, they gave you
300k euros, but they can sell the property only for 250k so they will have a
debpt on this business. Basically that's the reason why bank never do 100%
mortgage and they calculate with such a bad situation. So if the property
market is dropping for longer period then bank will increase the minimum
part you have to have when buying a house. But you will not be able to pay
that because you lost it on your previous house when sold it at a lower
rate... business slows down and price drops even more...

> Funny NYPD wrote:
>
> > The real bad news for today is: the house market in the US is keep
> > falling, and no sign of recover.
>
> Why is this bad? It doesn't matter much for all who have a house and no
> or only reasonable debt. It is good for all who want to buy a house. It
> is bad for those who happen to have a house with more debt than the
> house is worth -- which is probably a small minority.
>
> Gerhard

You need to look into what happens in mortgage defaults a little more.

First off, most of the payments on a typical 30 year mortgage are interest
for seven or more years, before any principal really starts to get paid, or
longer if the mortgage is "upside-down". See any standard amortization
schedule for this.

Most people think they're "buying houses", but since the average person
MOVES in seven years, all they ever do is pay interest.

When the house is worth less than the mortgage, there are options. None of
them good, but options nonetheless.

One is personal bankruptcy.

Another is asking the lender if they'll take the deed in lieu of payment and
you walk away. (Your bargaining chip there is that if they default, you're
going to walk away anyway, and a lengthy foreclosure will cost them more
than you just signing the property away.) They don't have to accept this,
and many don't, but in some cases it makes more sense for both parties.
Many times they'll re-negotiate your interest rate, set up payments,
whatever... if they have that option themselves...

And there's others...

Next, banks DO make 100% mortgages. At least they did during the
bubble/boom, and shouldn't have. Many people had SECOND mortgages for 120%
of the home's value prior to the market collapse. They're also common in
business. (Less common in residential lending, but still they're out
there.)

You've pointed out the really obvious thing that most people miss in a
declining economy, though -- that prices of everything fall.

Those running around saying the free-fall will never stop are wrong, because
as prices on other goods/services fall, they become "affordable" again for
those who didn't over-extend themselves into debt, had at least an 8 month
or bigger CASH emergency fund saved up (in case they lost their job) and
were fiscally responsible.

The biggest bummer of the whole thing is, both the fiscally responsible and
the irresponsible people living on debt, both have to pay for these bank
"bailouts". That's not fair. Charge it to those who walked away from their
mortgages. One incentive we'll NEVER see is a tax break to those who
actually paid attention to their finances, and did it "right", and never
cared about "the market".

But whatever. The fiscally responsible are still in better shape at the end
of the day.

Debt-free is the only way to really live. I'm almost there as far as
consumer debt goes, and I'm not looking back. The mortgage is next. I hear
there's nothing better than living in a paid off house, and I intend to do
whatever it takes to find out for myself.

And we haven't even come CLOSE to seeing the levels of sacrifice needed to
survive a real Depression. People are whining that they can't buy toys, not
essentials, mostly... right now. (There's always someone struggling to find
essentials, but so far most news reports I'm reading are mom's complaining
that they can't buy processed food snacks for the kids. The recent peanut
butter scare notwithstanding, lots of kids like Peanut Butter & Jelly...
adults too... and a family CAN *survive* on stuff like that. We're spoiled.
Do we need to go to the movies, or can we play a board game? You know...
stuff like that. The real skill is in learning not to care what the Jones's
next door have or do, and to enjoy what you have. Maybe this "global
downturn" will create a new generation of people who are thankful for the
little stuff. Talk to anyone who's still alive who lived through the Great
Depression and see how much they've chased the Golden Goose. Most of them,
not much. But they've got lifelong friends, and happiness, and enjoy
themselves immensely. They can probably also teach you how to go shoot wild
game for dinner, and prepare it. And yep, it's tasty. Urbanization might
make that a bit difficult, though. So start by planting a vegetable garden.
Fresh veggies from the garden are great, and you'll be busy all summer
pulling weeds, watering, etc... you won't even have time to notice that
you're "broke".)

> The real bad news for today is: the house market in the US is keep
> falling, and no sign of recover.

Why is this bad? It doesn't matter much for all who have a house and no
or only reasonable debt. It is good for all who want to buy a house. It
is bad for those who happen to have a house with more debt than the
house is worth -- which is probably a small minority.

Yes, we hardly can see 'free-fall' as there is always an action taken. Like
the bank drops the interests to boost the market or the economy starts
growing again so people will have money again and security to get the
mortgage. Sometimes even the government has to make some actions too like
reduced taxes or helping out the banking system. When nothing helps the
results can be devastating including war, civil war, rioting or anything
like that.

After the 2nd world war in Hungary the inflation was such high that everyone
got paid daily basis and everyone spent all the money on food straight away
- the next day the same money worth nothing. There were new notes every
week, at the end like 10 billion bill-Pengo (so 10 billion*billion !). The
only way to stop it was to introduce a new currency (which was the Forint
still using in Hungary - HUF) and make other radical decitions against the
'price increasers', like people who buy off the food on a market and sell
those to others at a higher price - by that time that was a bigger crime
than killing someone, therefore death penalty was for that.

So free-fall? Yes, could happen...

Anyway, the original question was that 'why price drop on the housing market
is bad' :-)

> You need to look into what happens in mortgage defaults a little more.
>
> First off, most of the payments on a typical 30 year mortgage are interest
> for seven or more years, before any principal really starts to get paid, or
> longer if the mortgage is "upside-down". See any standard amortization
> schedule for this.
>
> Most people think they're "buying houses", but since the average person
> MOVES in seven years, all they ever do is pay interest.
>
> When the house is worth less than the mortgage, there are options. None of
> them good, but options nonetheless.
>
> One is personal bankruptcy.
>
> Another is asking the lender if they'll take the deed in lieu of payment
> and
> you walk away. (Your bargaining chip there is that if they default, you're
> going to walk away anyway, and a lengthy foreclosure will cost them more
> than you just signing the property away.) They don't have to accept this,
> and many don't, but in some cases it makes more sense for both parties.
> Many times they'll re-negotiate your interest rate, set up payments,
> whatever... if they have that option themselves...
>
> And there's others...
>
> Next, banks DO make 100% mortgages. At least they did during the
> bubble/boom, and shouldn't have. Many people had SECOND mortgages for 120%
> of the home's value prior to the market collapse. They're also common in
> business. (Less common in residential lending, but still they're out
> there.)
>
> You've pointed out the really obvious thing that most people miss in a
> declining economy, though -- that prices of everything fall.
>
> Those running around saying the free-fall will never stop are wrong,
> because
> as prices on other goods/services fall, they become "affordable" again for
> those who didn't over-extend themselves into debt, had at least an 8 month
> or bigger CASH emergency fund saved up (in case they lost their job) and
> were fiscally responsible.
>
> The biggest bummer of the whole thing is, both the fiscally responsible and
> the irresponsible people living on debt, both have to pay for these bank
> "bailouts". That's not fair. Charge it to those who walked away from
> their
> mortgages. One incentive we'll NEVER see is a tax break to those who
> actually paid attention to their finances, and did it "right", and never
> cared about "the market".
>
> But whatever. The fiscally responsible are still in better shape at the
> end
> of the day.
>
> "The sky is falling, the sky is falling." Yeah, great. Pass me the
> remote,
> let's watch something else.
>
> Debt-free is the only way to really live. I'm almost there as far as
> consumer debt goes, and I'm not looking back. The mortgage is next. I
> hear
> there's nothing better than living in a paid off house, and I intend to do
> whatever it takes to find out for myself.
>
> And we haven't even come CLOSE to seeing the levels of sacrifice needed to
> survive a real Depression. People are whining that they can't buy toys,
> not
> essentials, mostly... right now. (There's always someone struggling to
> find
> essentials, but so far most news reports I'm reading are mom's complaining
> that they can't buy processed food snacks for the kids. The recent peanut
> butter scare notwithstanding, lots of kids like Peanut Butter & Jelly...
> adults too... and a family CAN *survive* on stuff like that. We're
> spoiled.
> Do we need to go to the movies, or can we play a board game? You know...
> stuff like that. The real skill is in learning not to care what the
> Jones's
> next door have or do, and to enjoy what you have. Maybe this "global
> downturn" will create a new generation of people who are thankful for the
> little stuff. Talk to anyone who's still alive who lived through the Great
> Depression and see how much they've chased the Golden Goose. Most of them,
> not much. But they've got lifelong friends, and happiness, and enjoy
> themselves immensely. They can probably also teach you how to go shoot
> wild
> game for dinner, and prepare it. And yep, it's tasty. Urbanization might
> make that a bit difficult, though. So start by planting a vegetable
> garden.
> Fresh veggies from the garden are great, and you'll be busy all summer
> pulling weeds, watering, etc... you won't even have time to notice that
> you're "broke".)
>
> Nate
>

Isn't the 800 billion US$ the American government dump to the market make the US$ reducing its value?
Your post makes me nevers on my savings. If the goveroment put too much paper dollar into the market, the value of all those paper dollar will definitely shrink.
Funny N.
Au Group Electronics, http://www.AuElectronics.com

Yes, we hardly can see 'free-fall' as there is always an action taken. Like
the bank drops the interests to boost the market or the economy starts
growing again so people will have money again and security to get the
mortgage. Sometimes even the government has to make some actions too like
reduced taxes or helping out the banking system. When nothing helps the
results can be devastating including war, civil war, rioting or anything
like that.

After the 2nd world war in Hungary the inflation was such high that everyone
got paid daily basis and everyone spent all the money on food straight away
- the next day the same money worth nothing. There were new notes every
week, at the end like 10 billion bill-Pengo (so 10 billion*billion !). The
only way to stop it was to introduce a new currency (which was the Forint
still using in Hungary - HUF) and make other radical decitions against the
'price increasers', like people who buy off the food on a market and sell
those to others at a higher price - by that time that was a bigger crime
than killing someone, therefore death penalty was for that.

So free-fall? Yes, could happen...

Anyway, the original question was that 'why price drop on the housing market
is bad' :-)

> You need to look into what happens in mortgage defaults a little more.
>
> First off, most of the payments on a typical 30 year mortgage are interest
> for seven or more years, before any principal really starts to get paid, or
> longer if the mortgage is "upside-down". See any standard amortization
> schedule for this.
>
> Most people think they're "buying houses", but since the average person
> MOVES in seven years, all they ever do is pay interest.
>
> When the house is worth less than the mortgage, there are options. None of
> them good, but options nonetheless.
>
> One is personal bankruptcy.
>
> Another is asking the lender if they'll take the deed in lieu of payment
> and
> you walk away. (Your bargaining chip there is that if they default, you're
> going to walk away anyway, and a lengthy foreclosure will cost them more
> than you just signing the property away.) They don't have to accept this,
> and many don't, but in some cases it makes more sense for both parties.
> Many times they'll re-negotiate your interest rate, set up payments,
> whatever... if they have that option themselves...
>
> And there's others...
>
> Next, banks DO make 100% mortgages. At least they did during the
> bubble/boom, and shouldn't have. Many people had SECOND mortgages for 120%
> of the home's value prior to the market collapse. They're also common in
> business. (Less common in residential lending, but still they're out
> there.)
>
> You've pointed out the really obvious thing that most people miss in a
> declining economy, though -- that prices of everything fall.
>
> Those running around saying the free-fall will never stop are wrong,
> because
> as prices on other goods/services fall, they become "affordable" again for
> those who didn't over-extend themselves into debt, had at least an 8 month
> or bigger CASH emergency fund saved up (in case they lost their job) and
> were fiscally responsible.
>
> The biggest bummer of the whole thing is, both the fiscally responsible and
> the irresponsible people living on debt, both have to pay for these bank
> "bailouts". That's not fair. Charge it to those who walked away from
> their
> mortgages. One incentive we'll NEVER see is a tax break to those who
> actually paid attention to their finances, and did it "right", and never
> cared about "the market".
>
> But whatever. The fiscally responsible are still in better shape at the
> end
> of the day.
>
> "The sky is falling, the sky is falling." Yeah, great. Pass me the
> remote,
> let's watch something else.
>
> Debt-free is the only way to really live. I'm almost there as far as
> consumer debt goes, and I'm not looking back. The mortgage is next. I
> hear
> there's nothing better than living in a paid off house, and I intend to do
> whatever it takes to find out for myself.
>
> And we haven't even come CLOSE to seeing the levels of sacrifice needed to
> survive a real Depression. People are whining that they can't buy toys,
> not
> essentials, mostly... right now. (There's always someone struggling to
> find
> essentials, but so far most news reports I'm reading are mom's complaining
> that they can't buy processed food snacks for the kids. The recent peanut
> butter scare notwithstanding, lots of kids like Peanut Butter & Jelly...
> adults too... and a family CAN *survive* on stuff like that. We're
> spoiled.
> Do we need to go to the movies, or can we play a board game? You know...
> stuff like that. The real skill is in learning not to care what the
> Jones's
> next door have or do, and to enjoy what you have. Maybe this "global
> downturn" will create a new generation of people who are thankful for the
> little stuff. Talk to anyone who's still alive who lived through the Great
> Depression and see how much they've chased the Golden Goose. Most of them,
> not much. But they've got lifelong friends, and happiness, and enjoy
> themselves immensely. They can probably also teach you how to go shoot
> wild
> game for dinner, and prepare it. And yep, it's tasty. Urbanization might
> make that a bit difficult, though. So start by planting a vegetable
> garden.
> Fresh veggies from the garden are great, and you'll be busy all summer
> pulling weeds, watering, etc... you won't even have time to notice that
> you're "broke".)
>
> Nate
>

There are people who will ENJOY the higher interest rates, though -- what I
wouldn't give to invest in an 80's era money-market fund today...

The thing is... you have to start being responsible with your money
someday... and most people aren't willing to do it. If you HAVE some money
to invest in the still-to-come recovery and higher interest rates if
inflation kicks in, you do just fine. If you're just paying for higher
priced goods with the same salary, you're hosed.

Those who don't study finance, like history, are doomed to repeat their
mistakes. And NONE of this is difficult financial transactions we're
talking about here... this is just the boring, easy, macroeconomic stuff you
can find in ANY personal finance book in Chapters 1-5, usually.

Every generation has a new "guru" of finance, but they all say the same
thing:

"Spend less, save more, don't borrow for anything you don't have to.
Sacrifice to get there."

I'm not saying I'm GOOD at it, but it's like the old bear in the woods story
-- two guys running away, and one stops to put on his track shoes.

His friend says, "Don’t stop, if you don't out-run the bear, it will catch
you."

"I don't have to out-run the bear, I only have to out-run YOU!"

:-)

Now in real money and relationships, of course, people come first... you
help family, you help friends... you do what you can. But the story
adequately describes how those who stay just a little bit ahead of the game
feel, compared to those who are being yanked around by it.

All it takes is an hour a week to do a detailed budget. If you don't like
the word "budget", call it "planning for my life". Whatever works to get
you motivated... just do it!

And for those who think they're already in too much trouble to bother with
it... the other old story comes to mind...

"If your in the bottom of a hole and you can't seem to get out, stop
digging."

>
> On Jan 22, 2009, at 7:15 PM, Funny NYPD wrote:
>
> Isn't the 800 billion US$ the American government dump to the market
> make the US$ reducing its value?
> Your post makes me nevers on my savings. If the goveroment put too
> much paper dollar into the market, the value of all those paper
> dollar will definitely shrink.
> Funny N.
> Au Group Electronics, http://www.AuElectronics.com

Yes and when will this inflation occur ?
MA

_

WFT Electronics
Denver, CO 720 222 1309
" dent the UNIVERSE "

All ideas, text, drawings and audio , that are originated by WFT
Electronics ( and it's principals ), that are included with this
signature text are to be deemed to be released to the public domain as
of the date of this communication .

> >
>> On Jan 22, 2009, at 7:15 PM, Funny NYPD wrote:
>>
>> Isn't the 800 billion US$ the American government dump to the market
>> make the US$ reducing its value?
>> Your post makes me nevers on my savings. If the goveroment put too
>> much paper dollar into the market, the value of all those paper
>> dollar will definitely shrink.
>> Funny N.
>> Au Group Electronics, http://www.AuElectronics.com
>
> Yes and when will this inflation occur ?

That's my question. The dollar actually got stronger in the recent months.
We're paying less for stuff we buy in euros, although the weaker euro is
reducing our exports...

> Anyway, the original question was that 'why price drop on the housing
> market is bad' :-)

Which seems to have been answered by "bad for some irresponsible ones,
bad for very few responsible ones, maybe a little bad for some more,
good for a number of responsible ones, and the majority isn't really
affected". Which seems to me to average around "not bad" :)

>>> The real bad news for today is: the house market in the US is keep
>>> falling, and no sign of recover.
>>
>> Why is this bad? It doesn't matter much for all who have a house and
>> no or only reasonable debt. It is good for all who want to buy a
>> house. It is bad for those who happen to have a house with more debt
>> than the house is worth -- which is probably a small minority.

>a small minority.
This is not true in the United States. This country is living on debts, that's why the banking system in the States is so big. USA is a large country consuming huge amount of goods, but that doesn't means the peole here are all rich. Many peole buy luxuary goods by Loans/debts.

It is not surprise at all to see some people used his next 5-20 years potential earning/money (by getting loans from Banks/credit card companies) in the passed 20 years. Now the economy situation getting worse and worse, lots of people have no much choice but bankrupt.

This situation is basically why those $800 billion were needed. However, the people in charge of the money lied to the Congress and moved the money to banks and rich people who really don't need those cash for daily life. Many of those money has been spend as luxuary bank parties, bank CEO bonus, etc. There is really no much control in this country.
Funny N.
Au Group Electronics, http://www.AuElectronics.com

>>> The real bad news for today is: the house market in the US is keep
>>> falling, and no sign of recover.
>>
>> Why is this bad? It doesn't matter much for all who have a house and
>> no or only reasonable debt. It is good for all who want to buy a
>> house. It is bad for those who happen to have a house with more debt
>> than the house is worth -- which is probably a small minority.

> Why is this bad? It doesn't matter much for all who have a house and no
> or only reasonable debt. It is good for all who want to buy a house.
It will be good for them once the market bottoms out but until it does
morgage lenders are going to be pretty cautious making life difficult
for buyers who don't have a lot of cash one hand (which afaict most
buyers don't).

> It
> is bad for those who happen to have a house with more debt than the
> house is worth -- which is probably a small minority.
It is probablly a small minority when looked at in terms of total
homeowners but among younger homeowners I would imagine either very low
equity or even negative equity is quite common. People on very high
proportion morgages are of course more vulnerable but even a very
reasonable 25% deposit will have been wiped out in the worse hit areas.

and yonger people are more likely to be the ones with a good reason to
have to move.

Sigh... wow, you're REALLY not paying attention to the financial news are
you? (The people who actually know where the money's going, not the popular
horse-crap on the Internet.)

The bankers never "lied" to anyone. The Government handed them 800 billion
WITHOUT ANY DIRECTION OR REQUIREMENTS as to where it was supposed to go.

If you have a beef, it's with your elected officials, not the bankers.
Bernanke is an idiot, and so are the elected officials who passed that first
bill.

Without requirements on where it was to go, the banks looked around and
realized that they did not want to lend out the money and put it into the
economy, they wanted to use it to have an all-out free-for-all buying other
banks with it, because that is better for their SHAREHOLDER VALUE.

If they can buy other weaker banks and have a TARP guarantee on the failing
bank's bad debt, they end up a MUCH bigger bank, virtually overnight.

There's some real strange politics going on here... think about it.

Anyway... it's not the bank's fault the politicians didn't tell them what to
do with the money, and just handed it to them with no strings attached.
Note that a few weeks later, the idiots in Congress leaned their lesson and
put strings on the Auto Manufacturer's bailout money, like they should have
done from the start on the banking money.

The money spent on "luxury parties" etc, could have all been stopped by
passing a bill that was well-written. And there's another piece to that...
banks that didn't need TARP money and were RESPONSIBLE with their lending
would definitely steal the best employees from the bad banks, something that
if the bad banks were going to go under, wouldn't be any big deal -- but
their salespeople (known by the recently politically incorrect term as
"brokers") are used to making their salaries and living a certain way when
they make their companies big money.

If the bad banks weren't allowed to continue paying those bonuses and
salaries, their brokers would all leave, and they'd fail anyway.

The moral of the story is... they should have failed. But everyone was too
scared to see if that would lead to the Great Depression II. NO GOVERNMENT
MONEY should have shored up institutions that make bad loans.

The only "good" that comes out of this right now, is that banks that DID NOT
MAKE AS MANY BAD LOANS are now in charge of the other banks, by BUYING them
with the bailout money. THIS DOESN'T HELP GET CREDIT INTO THE ECONOMY, but
it's at least a slightly positive use of the money in the long-term.

In the short-term, the government didn't get what they wanted -- banks to
lend. Even people with spotless credit history are finding loans hard to
come by, still. This is driven by just HOW MUCH bad debt is still floating
out there, not well accounted for.

The problem is in the regulators back for years and years... NPR did a nice
podcast on how we ended up here, clear back in May of 2008 -- here's the
transcript, or you can download the longer audio version that was done for
"This American Life", or the shorter version for "All Things Considered":

(I'm not a huge NPR fan, but they did a nice job of explaining it, and also
explaining what people were already starting to go through back in May,
which has only gotten worse...)

Nate

p.s. I would HIGHLY recommend that before you get all riled up by the
popular press and the crap on the Internet, you listen to some of the people
IN THE FINANCIAL INDUSTRY, normal people doing their jobs, not the CEO's,
and see how we really got here -- and not go flying off the handle demanding
that bankers be stripped of their profits, etc.

If you do that, banks simply will continue not to lend. What motivation
would they have to make a profit this year, if the top-producers aren't
going to get paid? I'd hold onto the cash and wait a year too, until things
settled down politically, if I were them. Wouldn't you?

Proper incentives go a long way to fixing our current situation. Handing
out free Government Cheese (money) is NOT proper incentives/disincentives,
but they're doing it... so demand they do it in a way that gives YOU a
benefit. You're paying for it, after all.

The fact that the CongressCritters were so busy adding pork to the bailout
bill that they forgot to put any real thought into it, and left it wide open
to use the cash to acquire all the deposits, but none of the bad debt of
their COMPETITORS, was just gravy.

That's just "good business" on their part, for their shareholders. And yes,
it's OBVIOUS that they give the wrong incentives to their employees, but
they have to find reasons for these people to work jobs in NY that will kill
you in just a few years of doing them, with the stress and pressure to
perform.

If you want to get pissed off, get pissed off at your own representatives
from your district in Congress and VOTE THEM OUT at mid-terms, NO MATTER
THEIR PARTY AFFILIATION, and hope for smarter ones next time. Both House
and Senate, as they come up for election...

You're probably right. Younger homeowners are a bit "stuck" right now. I'm
in my late 30's and my second home, and I'm dead-even right now... but I
consider my house something I *must have*, not an investment. It's WHERE I
LIVE, not something to track equity on.

If I have to take a loss selling it (commissions), that's life. The next
house (in the same down market) would be less expensive, if I were to buy in
the same area.

What this will REALLY lead to is younger folks who lose a job or whatever,
will HAVE to move to cheaper areas of the country, and/or look for jobs
there -- which long-term, may not be a bad thing. Do we really want
everyone crammed into the coasts?

These younger folks who are smart, will look for jobs in up and coming areas
inland, where they can survive the moving losses.

Well, I remembered the day before the $800billion bill was voted down, I was on business traveling and lived in a hotel at Buffalo NY, apparently the TV talk-show guys on that night is mad of the tax money were be about to put into the banker's pocket, he talked many staff against this action, the next day, the bill was voted down. Immediately, everybody pointed a finger on the news to the lady who in charge of the house and the TV guy who against the bill was also removed at Buffalo TV station, another guy favored to the bank talked all the time that night on the TV about why the bank need those cash to help regular Americans. It put a lot pressure to senators who think and vote independently. And finally the bill is passed under all those medium pressure. It is not I am not watching the news, it is because I want to be myself and think independently.

Sigh... wow, you're REALLY not paying attention to the financial news are
you? (The people who actually know where the money's going, not the popular
horse-crap on the Internet.)

The bankers never "lied" to anyone. The Government handed them 800 billion
WITHOUT ANY DIRECTION OR REQUIREMENTS as to where it was supposed to go.

If you have a beef, it's with your elected officials, not the bankers.
Bernanke is an idiot, and so are the elected officials who passed that first
bill.

Without requirements on where it was to go, the banks looked around and
realized that they did not want to lend out the money and put it into the
economy, they wanted to use it to have an all-out free-for-all buying other
banks with it, because that is better for their SHAREHOLDER VALUE.

If they can buy other weaker banks and have a TARP guarantee on the failing
bank's bad debt, they end up a MUCH bigger bank, virtually overnight.

There's some real strange politics going on here... think about it.

Anyway... it's not the bank's fault the politicians didn't tell them what to
do with the money, and just handed it to them with no strings attached.
Note that a few weeks later, the idiots in Congress leaned their lesson and
put strings on the Auto Manufacturer's bailout money, like they should have
done from the start on the banking money.

The money spent on "luxury parties" etc, could have all been stopped by
passing a bill that was well-written. And there's another piece to that...
banks that didn't need TARP money and were RESPONSIBLE with their lending
would definitely steal the best employees from the bad banks, something that
if the bad banks were going to go under, wouldn't be any big deal -- but
their salespeople (known by the recently politically incorrect term as
"brokers") are used to making their salaries and living a certain way when
they make their companies big money.

If the bad banks weren't allowed to continue paying those bonuses and
salaries, their brokers would all leave, and they'd fail anyway.

The moral of the story is... they should have failed. But everyone was too
scared to see if that would lead to the Great Depression II. NO GOVERNMENT
MONEY should have shored up institutions that make bad loans.

The only "good" that comes out of this right now, is that banks that DID NOT
MAKE AS MANY BAD LOANS are now in charge of the other banks, by BUYING them
with the bailout money. THIS DOESN'T HELP GET CREDIT INTO THE ECONOMY, but
it's at least a slightly positive use of the money in the long-term.

In the short-term, the government didn't get what they wanted -- banks to
lend. Even people with spotless credit history are finding loans hard to
come by, still. This is driven by just HOW MUCH bad debt is still floating
out there, not well accounted for.

The problem is in the regulators back for years and years... NPR did a nice
podcast on how we ended up here, clear back in May of 2008 -- here's the
transcript, or you can download the longer audio version that was done for
"This American Life", or the shorter version for "All Things Considered":

(I'm not a huge NPR fan, but they did a nice job of explaining it, and also
explaining what people were already starting to go through back in May,
which has only gotten worse...)

Nate

p.s. I would HIGHLY recommend that before you get all riled up by the
popular press and the crap on the Internet, you listen to some of the people
IN THE FINANCIAL INDUSTRY, normal people doing their jobs, not the CEO's,
and see how we really got here -- and not go flying off the handle demanding
that bankers be stripped of their profits, etc.

If you do that, banks simply will continue not to lend. What motivation
would they have to make a profit this year, if the top-producers aren't
going to get paid? I'd hold onto the cash and wait a year too, until things
settled down politically, if I were them. Wouldn't you?

Proper incentives go a long way to fixing our current situation. Handing
out free Government Cheese (money) is NOT proper incentives/disincentives,
but they're doing it... so demand they do it in a way that gives YOU a
benefit. You're paying for it, after all.

The fact that the CongressCritters were so busy adding pork to the bailout
bill that they forgot to put any real thought into it, and left it wide open
to use the cash to acquire all the deposits, but none of the bad debt of
their COMPETITORS, was just gravy.

That's just "good business" on their part, for their shareholders. And yes,
it's OBVIOUS that they give the wrong incentives to their employees, but
they have to find reasons for these people to work jobs in NY that will kill
you in just a few years of doing them, with the stress and pressure to
perform.

If you want to get pissed off, get pissed off at your own representatives
from your district in Congress and VOTE THEM OUT at mid-terms, NO MATTER
THEIR PARTY AFFILIATION, and hope for smarter ones next time. Both House
and Senate, as they come up for election...

Understand. I'm just saying, the politics that hits the mainstream news
isn't always what the real balance sheets show.

In the long run, those banks that took the money and bought out competitors,
along with their TARP guarantees from the Fed, are going to be bigger,
powerhouse banks, because of it.

The problem is: That's not what the politicians intended the money to do.
They were following Bernanke's lead in "get it done quick or this gets
worse" but screwed it up by not forcing the banks to LEND that money out...

The "bailout" of the banks was INTENDED to loosen the frozen credit markets.
If banks wouldn't lend to each other, Bernanke thought, if we give them
money, they'll lend THAT out. They didn't, they used it for ACQUISITIONS of
other banks... which made sense on paper, but didn't get the job done.

800B down the tubes, basically, because of who we all voted for. Our
representatives are out to protect their political interests (pork spending)
instead of getting the intended use out of our money they spent.

It's pretty ugly, but I don't see it the same way you do... the banks aren't
at fault. They're doing what banks do. It's the fault of the people who
handed them the money not putting proper restrictions on how it could be
used, and applying government oversight over that requirement.

In other words, Congress "wasted" 800B. (Oh, by the way, the press didn't
report heavily on this, but the bill was a LOT bigger than 800B after all
the pork spending was added. Try 1.2T on for size. That's closer to the
real number of the FIRST bailout bill for the banks, long before the Auto
Manufacturer's bailout.)

I just wanted to say that I'm really impressed. I haven't seen posts on the
subject that made so much sense, in a long time.

I made a post a while back, about a young economist who was explaining to a
bunch of congressmen why the money was needed, and what was to be done with
it. He suggested that the government should basically hold a series of
auctions, and buy the banks' assetts. This would provide liquidity (cash) to
the banks, and give the government assets that it can hold and sell in the
future (perhaps even making a hefty profit).

I hear irrational calls to nationalize the banking system more often now,
recently on NPR there was a caller who said the government should disburse
the money directly to the people who need it. The guest replied that it
would be a bad idea, since goverments are notorious for poor handling of
businesses, including financial institutions.

Vitaliy wrote:
> Nate,
>
> I just wanted to say that I'm really impressed. I haven't seen posts on the
> subject that made so much sense, in a long time.
>
Ahh, thank you, but I really don't feel all that smart about it all, I
just read.

So, Barney Frank wrote in provisions that his own home-state bank would
get money while others didn't. This from the guy who screamed the
loudest to the Press that the bill shouldn't even pass in the first
place? Now we know what he was doing... securing Pork, pork, pork! (For
himself.)

Until his constituents vote him out, out, out, he'll continue to do so,
I guess. Are they smart enough to see through his B.S., or are they glad
he saved one of their banks so they'll put him back in office (again)?
Only time will tell whether they want integrity or just whatever they
can get through Mr. Frank's ability to practice coercion in Washington.

> I made a post a while back, about a young economist who was explaining to a
> bunch of congressmen why the money was needed, and what was to be done with
> it. He suggested that the government should basically hold a series of
> auctions, and buy the banks' assetts. This would provide liquidity (cash) to
> the banks, and give the government assets that it can hold and sell in the
> future (perhaps even making a hefty profit).
Auctions would have been interesting. Only healthy banks (the ones they
wanted to save) would have been able to afford the "government
insurance", since that was the real crisis after all... AIG held the
fake insurance on most of the derivatives, thus they had to be saved
even before the banks.

> I hear irrational calls to nationalize the banking system more often now,
> recently on NPR there was a caller who said the government should disburse
> the money directly to the people who need it. The guest replied that it
> would be a bad idea, since goverments are notorious for poor handling of
> businesses, including financial institutions.
>
If all my "Hope and Change" is supposed to come from the Federal
government, we're way too far gone to save. Personally, I'm not willing
yet to concede that I can't go out, make a living, create my own wealth,
and tell the government to shove it when they come looking for a handout...

But that's just me... "Hope and Change" spring eternal in this
household, by our own hard work -- not because of ANY Washington
politician or ideologue. We get off our butts and go work for what we
want. Must be the stubborn German heritage a few generations ago?

As an almost-centrist politically, I'd say the government is there as
the FINAL safety net for the average Joe six-pack (or Joe-the-Plumber
even? Ha!), but when you see the types of things people are WHINING
about that they can't afford -- we're just not there yet.

An example would be this story from Bloomberg News below... since our
topic is Microsoft in our subject line, look what they say they'll be
giving up in Redmond.

(Actually if you read the whole article it's just about these places
WORRYING that Microsoft will cut these perks, they haven't even cut them
yet!)

$300 checks for "transportation", no one buying $1600 bicycles,
furniture rentals in the area will drop (duh!), and the $135/month
health club benefit paid to employees for a nicely wood-paneled workout
gym down the street is at risk! Oh no! Disaster! Guess what Washington
State? Microsoft has always been a BUBBLE. Word processors aren't worth
$300 in today's world. Haven't been for a while, but times were good and
we all paid it.

So, REALLY? A recession? How about... "Not spoiled brats anymore."

Keep the article below in mind every time you spend another $300 on
Microsoft Office... just to have a word processor that's "standard"...
(sigh, yeah, I have a copy too... one anyway...).

I also got a kick out of how even a Bloomberg reporter doesn't
understand the term "diversification" at all. Switching from Airplanes
and Logging to have everyone work at the same giant software company
isn't "diversified" business... sigh...

And of course, two other things popped out at me... the "5,000" is only
IF they choose. Only 1400 got cut so far.

And the real reason: "Investors want the company to reduce costs
further." Ahh, welcome to the real reason they're cutting back. It's
about the shareholders, bottom line. If Microsoft can retain the best
and brightest without giving them gym memberships and bicycles in
today's down market, they will.

Nate

-------

(BN) Microsoft Cuts Mean Leaner Times for City That Loves $1,599 Carbon
Bikes

Jan. 23 (Bloomberg) -- Matt Chapman’s bicycle shop east of Seattle
always gets a sales boost in summer. Not because of the weather. It’s
when Microsoft Corp.’s interns arrive, carrying $300 checks from their
employer for transportation.

“Three hundred dollars goes a long way toward an inexpensive bike and a
helmet,” said Chapman, 22, a sales associate at Performance Bicycle
Shop, a short ride from Microsoft’s campus in Redmond, Washington. For
older employees, the $1,599 carbon-fiber Scattante CFR is a top seller,
he said.

After the world’s largest software maker made its first companywide job
cuts yesterday, the local businesses that rely on the spending power of
Microsoft’s workforce and company subsidies on such items as gym
memberships are bracing for bumps.

“We count on them,” said Redmond rental consultant Sheryl Rodriguez,
after sending a newly hired Microsoft worker and his mother off to look
at apartments yesterday morning.

Rodriguez rents furniture and handles relocations for Cort, a unit of
Omaha, Nebraska-based Berkshire Hathaway Inc., and she estimated 30
percent of its Redmond business comes from Microsoft. Sales already
started slumping in November, she said.

Co-founded by Seattle native Bill Gates 34 years ago, Microsoft helped
the city diversify its national identity from airplanes and logging. In
the 1990s, its stock rose so much that some employees quit and started
boutiques or motorcycle shops.

5,000 Jobs

Microsoft is eliminating as many as 5,000 jobs and 5,000 or more
contract workers. It said 1,400 jobs would be cut yesterday, most in the
Seattle area, where it employs 41,480. The company said it will still
add workers in some areas for a net reduction of 2,000 to 3,000 jobs.

Investors want the company to reduce costs further, said Sid Parakh, an
analyst at McAdams Wright Ragen in Seattle.

“It doesn’t have to be job cuts; it can be marketing expenses, it can be
different sources,” he said. “Everyone across the board in technology is
taking pretty sharp cuts, and Microsoft could do more.”

On the foggy Redmond campus yesterday, cranes towered overhead and
cement trucks rumbled past to complete an expansion Microsoft began in
2005. Young Microsoft workers in gloves and long pants sweated through a
pickup soccer game.

Others walked to the nearby Pro Sports Club, which has wood- paneled
lockers, four pools and its own florist. Microsofts pays for employees
to work out there. A private membership costs $135 a month.

“Microsoft is a big part of every business around here,” said club
president Dick Knight. “At this point, we don’t know what the effect
would be on us.”

Freezing Salaries

In an e-mailed statement, Microsoft said cuts to employee benefits are
not part of the current round of cost reductions. In addition to job
cuts, Microsoft is freezing salaries, paring travel costs 20 percent,
delaying parts of its campus expansion and reducing spending with vendors.

Software had been one of the few industries adding jobs in Washington
state.

After outperforming the U.S. economy much of last year, the state’s
unemployment rate hit 7.1 percent in December, almost matching the 7.2
percent national rate, the state Employment Security Department said
this week. The increase from 6.4 percent in November was the largest
monthly jump since 1976.

“Microsoft is yet another indicator that tough times are here, and no
company will emerge untouched,” Seattle Mayor Greg Nickels said in a
statement.

>> Why is this bad? It doesn't matter much for all who have a house and
>> no or only reasonable debt. It is good for all who want to buy a
>> house.
>
> It will be good for them once the market bottoms out but until it does
> morgage lenders are going to be pretty cautious making life difficult
> for buyers who don't have a lot of cash one hand (which afaict most
> buyers don't).

I know it's kind of a revolutionary approach (at least, so it seems, in
the USA), but how about saving up some money /before/ buying something?
That's a real possibility :) Of course the gratification isn't instant
and takes a while, and even some effort (you need to learn to appreciate
not owing money), and the neighbors can't see why you feel good, but it
might be worth a thought or two.

>> It is bad for those who happen to have a house with more debt than
>> the house is worth -- which is probably a small minority.
>
> It is probablly a small minority when looked at in terms of total
> homeowners ...

That's not the perspective I had in mind. I had in mind something like
"looked at in terms of total population". The ones really in need of
some help are probably not homeowners, not even subprime loaner
homeowners.

> ... but among younger homeowners I would imagine either very low
> equity or even negative equity is quite common. ... and yonger people
> are more likely to be the ones with a good reason to have to move.

I'm all for the young, but I don't think being a young homeowner with a
risky or even downright stupid financing is worth much. If you're young,
it's probably best to learn your lesson and start over, this time with a
decent plan. Seems to be real easy in the USA.

> People on very high proportion morgages are of course more vulnerable
> but even a very reasonable 25% deposit will have been wiped out in
> the worse hit areas.

IMO the problem is not the devaluation of the asset in itself. The
problem is if you have monthly payments that are at the limit you can
pay when things go well, then things don't go so well anymore, and then
the asset is devalued. Only then is there a problem. But I really have a
hard time finding some compassion in me for people that have besides
their mortgage consumer loans to pay for... the new couch, big screen
TV, new car, whatever... I was young, I was broke, and I know you can
live pretty nicely (and inexpensively) without all that crap. Maybe even
better than with it.

I haven't been in the housing market in the USA, so I wasn't really
informed. But the pricing situation seemed to me out of whack back in
2000 already, and people who I thought knew the marked confirmed that,
back then. If I, not being in the market for a house, knew that, I
imagine any (remotely responsible) buyer would have known it, too. Which
means that you need to put in quite some safety margin in your financing
(anticipating that the bubble may burst any time) -- and if you can't,
well then you don't.

The way some people put loans on their houses is like gambling, nothing
different. Bailing out those loans is not much different from having a
government stand at the exit of major casinos in LV, where people can
get back what they just lost inside. Most people would find this absurd,
but it's really not any different.

> peter green wrote:
>
>
>>> Why is this bad? It doesn't matter much for all who have a house and
>>> no or only reasonable debt. It is good for all who want to buy a
>>> house.
>>>
>> It will be good for them once the market bottoms out but until it does
>> morgage lenders are going to be pretty cautious making life difficult
>> for buyers who don't have a lot of cash one hand (which afaict most
>> buyers don't).
>>
>
> I know it's kind of a revolutionary approach (at least, so it seems, in
> the USA), but how about saving up some money /before/ buying something?
> That's a real possibility :) Of course the gratification isn't instant
> and takes a while, and even some effort (you need to learn to appreciate
> not owing money), and the neighbors can't see why you feel good, but it
> might be worth a thought or two.
>

There are a small minority of us over here who'd love to see this idea
catch on again, someday! Thanks for reiterating it, Gerard!!

> The way some people put loans on their houses is like gambling, nothing
> different. Bailing out those loans is not much different from having a
> government stand at the exit of major casinos in LV, where people can
> get back what they just lost inside. Most people would find this absurd,
> but it's really not any different.
>

Amen. :-) Don't forget that you can take that one step further...
since "the government" is really made up of money from everyone, the
reality is... it's the people who DID NOT GAMBLE on their place of
residence standing at the casino exit handing the idiots who did... the
money they saved.

"Gerhard Fiedler" wrote:
> I know it's kind of a revolutionary approach (at least, so it seems, in
> the USA), but how about saving up some money /before/ buying something?
> That's a real possibility :) Of course the gratification isn't instant
> and takes a while, and even some effort (you need to learn to appreciate
> not owing money), and the neighbors can't see why you feel good, but it
> might be worth a thought or two.

Credit is not going to go away, because something is worth more to me today,
than ten years from now. :)

[snip]
> But I really have a
> hard time finding some compassion in me for people that have besides
> their mortgage consumer loans to pay for... the new couch, big screen
> TV, new car, whatever... I was young, I was broke, and I know you can
> live pretty nicely (and inexpensively) without all that crap. Maybe even
> better than with it.

Hear, hear. I'm frequently surprised to see people whose income is half of
mine, spend twice as much on the things you mention.

You may have read a book called "Rich Dad, Poor Dad". Although there is a
lot of cynicism in the book, I like the point about "poor" being a state of
mind.

> I haven't been in the housing market in the USA, so I wasn't really
> informed. But the pricing situation seemed to me out of whack back in
> 2000 already, and people who I thought knew the marked confirmed that,
> back then. If I, not being in the market for a house, knew that, I
> imagine any (remotely responsible) buyer would have known it, too. Which
> means that you need to put in quite some safety margin in your financing
> (anticipating that the bubble may burst any time) -- and if you can't,
> well then you don't.

Very true. Although I can understand why so many people were tempted to
invest in real estate. They did it for the same reason pyramid schemes are
initially so attractive: they see their neighbors making lots of money, and
they don't want to be left behind.

> The way some people put loans on their houses is like gambling, nothing
> different. Bailing out those loans is not much different from having a
> government stand at the exit of major casinos in LV, where people can
> get back what they just lost inside. Most people would find this absurd,
> but it's really not any different.

In the end, I think it would be fair for the homeowners who borrowed more
than they could afford, to lose their home. They won't become homeless,
they'll just go back to renting, or living with their relatives -- whatever
they did before they bought a house. It would also be fair for the banks who
made the loans, to take a hit -- because it is their fault, too.

However, doing nothing will hurt everybody, whether they are at fault or
not. So for practical reasons, the bailout makes sense. The proposal to buy
toxic assets in a series of auctions, where each auction contains the same
type of assets, and the government purchases assets from the lowest bidder,
are likely to result in the biggest bang for the buck for the taxpayers.

> In the end, I think it would be fair for the homeowners who borrowed more
> than they could afford, to lose their home. They won't become homeless,
> they'll just go back to renting, or living with their relatives --
> whatever
> they did before they bought a house. It would also be fair for the banks
> who
> made the loans, to take a hit -- because it is their fault, too.

However - some, maybe many, will owe more than the property is worth,
especially under 'fire sale' conditions and end up not just as they were
before but also owing money - possibly a substantial amount. I know people
here that that happened to during an earlier downturn and they spent years
paying off a very large amount for no end benefit.

>> In the end, I think it would be fair for the homeowners who borrowed
>> more than they could afford, to lose their home. They won't become
>> homeless, they'll just go back to renting, or living with their
>> relatives -- whatever they did before they bought a house. It would
>> also be fair for the banks who made the loans, to take a hit --
>> because it is their fault, too.
>
> However - some, maybe many, will owe more than the property is worth,
> especially under 'fire sale' conditions and end up not just as they
> were before but also owing money - possibly a substantial amount. I
> know people here that that happened to during an earlier downturn and
> they spent years paying off a very large amount for no end benefit.

It seems some really need the pain to learn. Is it fair to take their
pain away -- and with it the opportunity to learn?

OTOH, there is personal bankruptcy. It seems in the USA this means
living for some 5 years under certain financial restrictions, and then
you're clean to start over. Not too bad a deal for someone who screwed
up really badly.

Taking up a large loan /is/ gambling, especially in a highly unstable
market (and growing too fast /is/ "unstable"). That's just what it is.
People want some huge benefit, for the price of a huge risk. I don't
think it's fair to the "responsible poor" (the ones renting because they
think they can't afford the risk) to have to bail out the "irresponsible
rich" (the ones buying because they want it /now/, not because they can
really afford it).

It's not that far a stretch to see the same thing happening in college
educations. People mortgaging their lives away not because they truly
wanted to learn something, but because they believe that the sheepskin
entitles them to a particular salary when they obtain it.

Many tradespeople without student loan debts who start their own
businesses end up with better balance sheets 30 years down the road
than college grads who get hired easily into corporations but never
have the discipline to pay off the loans.

LOTS of those types of folks are locked into those bad home loans too,
around here. Seems to me a pattern of faulty thinking about simple
money matters leads to a great many of modern society's biggest
problems right now.

The biggest fallacy? You aren't entitled to ANYTHING, but you're
certainly allowed to utilize your knowledge and education to make
yourself better off. The government is the LAST place one should look
for "hope".

Most people's fiscal ills can be described with math typically taught
to 10-12 graders. Compound interest can be done on a calculator if
the math is truly too difficult, for an investment of about $10.

Now if someone is running up debt to learn something and job or none,
the knowledge is worth it to you, that's a different story. I may do
that soon, as I'm deeply thinking about a long term career change.

I'm slowly losing my passion for fixing other people's telecom related
computer problems, after seeing their rewards versus mine. It's a
good salary, and good work, and I won't leave the industry lightly,
but I never pursued a childhood passion or two that deserve more effort.

Lowering expenses and equalizing work and "home" (school) time will
all be part of the series of barriers to overcome in this process if I
truly head off in a new direction.

Or as Robert Frost so aptly put it... "Two roads diverged in a yellow
wood..."

I'm at that part where I peer down both as far as the eye (heart?) can
see...

The more traveled road seems a little "safer" but might also be a
little sadder, due to regrets, many years hence.

I'm just a little paralyzed at the cross-roads, is all. Maybe a
fellow traveller will come along with some encouraging words and plow
into the underbrush on that less traveled side, and unwittingly become
an inspiration? Or not. Or I will just strike out one way or the
other after a little more introspection.

Life WILL let you stand there "too long", navel-gazing though. I know
that! A self imposed deadline might be good.

>> In the end, I think it would be fair for the homeowners who
>> borrowed more
>> than they could afford, to lose their home. They won't become
>> homeless,
>> they'll just go back to renting, or living with their relatives --
>> whatever
>> they did before they bought a house. It would also be fair for the
>> banks
>> who
>> made the loans, to take a hit -- because it is their fault, too.
>
> However - some, maybe many, will owe more than the property is worth,
> especially under 'fire sale' conditions and end up not just as they
> were
> before but also owing money - possibly a substantial amount. I know
> people
> here that that happened to during an earlier downturn and they spent
> years
> paying off a very large amount for no end benefit.
>
> FWIW
>
>
> Russell
>

> So you're saying they took a risk they didn't fully comprehend and had
> to suffer the consequences? I bet they won't do it again.

Would you really? I wouldn't. Maybe some won't do it again.

> Most people's fiscal ills can be described with math typically taught
> to 10-12 graders. Compound interest can be done on a calculator if
> the math is truly too difficult, for an investment of about $10.

With the disclosure laws being what they are, I think you don't need
much more than adding and subtracting, maybe a little multiplication,
division and percent calculation to figure things out. You won't get to
some finer details, but it's enough to make sound decisions. Real basic
math... no 10th grade needed, 5th or so should be enough.

> Now if someone is running up debt to learn something and job or none,
> the knowledge is worth it to you, that's a different story. I may do
> that soon, as I'm deeply thinking about a long term career change.

But even there are ways and ways... This thing about "keeping one's
living standard" (like it is the basis of some spouse support
regulations) I've never understood. Living means changing... and
sometimes you've got more, and other times you've got less.

> Lowering expenses and equalizing work and "home" (school) time will
> all be part of the series of barriers to overcome in this process if
> I truly head off in a new direction.

Right. For things you really want to do you'll find a way. Some other
stuff may have to step back for a while... but that doesn't have to
matter.

> The more traveled road seems a little "safer" but might also be a
> little sadder, due to regrets, many years hence.

I find that the worst enemies of a happy life are thinking that if I had
done something else I might be happier or better off and doubting
whether I'm doing the right thing now. In the end, nobody knows what
would have been if I had done something different, and nobody knows what
I need to do now to be better off in the future -- so it doesn't really
matter what I do. Just don't spoil whatever it is with doubts :)